Firms of Endearment: How World-Class Companies Profit from Passion and Purpose by Sheth Jagdish N. & Sisodia Rajendra S. & Wolfe David B

Author:Sheth, Jagdish N. & Sisodia, Rajendra S. & Wolfe, David B. [Sheth, Jagdish N.]
Language: eng
Format: mobi, epub
Publisher: Pearson Education (US)
Published: 2007-01-30T16:00:00+00:00

Figure 6-1. Whole Foods Market's 10-year stock performance (compared with the five biggest U.S. grocers)

Whole Foods stands out even among the stellar performers that make up the FoE universe. It has returned 185 percent over the past three years, 400 percent over the past five years (when the S&P 500 rose by only 13 percent), and 921 percent over the past 10 years! In fact, between December 31, 1995 and June 30, 2006, Whole Foods has returned over 1800 percent

The performance of Whole Foods and other FoE companies over the past decade suggests a need to revise the criteria for designating a company as a "great company." Look at Kroger's 10-year stock performance. It was one of Jim Collins's picks as a "good" company that became "great." Compare Whole Foods Market's financial performance with that of the Kroger grocery chain. Kroger made the Good to Great cut in 2000 from an original roster of 1,435 companies. Its stock had reached its then most recent 10-year high in early 1999. By the end of the next year, Kroger's stock had lost more than half of its value. Six years after being named a great company, in mid-2005, Kroger stock languished around 45 percent of its 1999 price.

What went wrong at Kroger is open to debate, but we suspect that in large part it is because Kroger lacks the kind of corporate culture and core values that serve a company best in times of volatile change.

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